SSTS # 6: Knowledge of Error: Return Preparation and Administrative Proceedings

Question 1

This statement sets forth the applicable standards for a member who becomes aware of

Answer 1

(a) an error in a taxpayer’s previously filed tax return;
(b) an error in a return that is the subject of an administrative proceeding, such as an examination by a taxing authority or an appeals conference; or
(c) a taxpayer’s failure to file a required tax return.

Question 2

*****This statement applies whether or not the member prepared or signed the return that contains the error.

Answer 2

stay on front

Question 3

If the taxpayer does not correct an error, a member should consider whether to withdraw from the engagement and whether to continue a professional or employment relationship with the taxpayer

Answer 3

stay on the front

Question 4

Once the member has obtained the taxpayer’s consent to disclose an error in an administrative proceeding, the disclosure should:

Answer 4

not be delayed to such a degree that the taxpayer or member might be considered to have failed to act in good faith or to have, in effect, provided misleading information

Question 5

If a member decides to continue a professional or employment relationship with the taxpayer and is requested to prepare a tax return for a year subsequent to that in which the error occurred, the member should take reasonable steps to ensure that the error is not
repeated.

Answer 5

stay on front